Here's Why This Burger Chain Is Increasingly Harder to Find
Unfortunately, the downward spiral isn't over for Steak 'n Shake. The popular burger and milkshake chain has been disappearing from towns all across America as the pandemic forced the company to go on a location-closing spree last year. And now, the latest reports about the chain are equally as grim: Steak 'n Shake has hired financial advisors and may be heading for bankruptcy.
According to Restaurant Business, the chain is currently exploring its financial options, which include an out-of-court restructuring or a bankruptcy filing. Parent company Biglari Holdings said it may not be able to refinance the $153 million loan that comes due in March. (Related: McDonald's Is Making These 8 Major Upgrades.)
Steak 'n Shake had 610 locations nationwide at the beginning of 2020, but had closed over 80 due to the pandemic. It currently operates about 500 locations, half of which are owned by Biglari and the others by franchisees and franchise partners.
Spread across 28 states, the chain is a hybrid of a sit-down, casual dining restaurant and a fast-food drive-thru operation that's best-known for juicy burgers and hand-dipped milkshakes. Despite its popularity, the chain has had financial troubles for years: Steak 'n Shake's same-store sales had been on the decline since 2016, and the pandemic only accelerated that loss.
The chain has tried to bounce back by shifting from dine-in to counter service and selling off some of its closed locations. However, CFO Steven May revealed the company is facing an uncertain future if those sales don't come to fruition.
"The company fears—based on the input of its advisers—that it will be forced to imminently close a number of its restaurants, lay off many of its employees, and lose franchise partners who are depending on upgrades to the restaurants they operate," May said in a court filing in August.